McKinsey: What is the right role of employers in making sure that the incumbent workforce can both meet current expectations and thrive in the future?
Kathleen McLaughlin: I think that 10 or 15 years ago people might not even have understood what it meant to develop the skills of incumbent workers, or why that would that be important. It’s really encouraging to me that it’s now just accepted that developing existing workers must be done. Most employers understand that skill development is critical to value creation, and they believe and see that better skills do correlate with higher employee retention.
Last year, the Walmart Foundation funded a US National Skills Coalition study that showed that, in the nation’s service sector—not just retail but also hospitality and healthcare—two-thirds of frontline workers have basic literacy gaps and three-quarters have numeracy gaps. And these people aren’t new to the sector; in many cases, they have been in the sector for quite some time. A significant number of them are supervisors. But many can’t fully perform their jobs because of these basic deficiencies. So the question is: How do employers help these people acquire skills that will help them move up? Well, retail is a great place to do that.
There are so many skills that people can just learn on the job in retail: problem-solving skills, customer service skills, and, to some extent, technology skills. For example, Walmart’s associate training for entry-level workers called Pathways is completed within the first 90 days and helps associates gain vital retail job skills such as communication, customer service, merchandising, and teamwork.
So, to improve workforce development in our society, we need to rewire how it works. What is the role of employers? Educators? The workers themselves? What should the role of government and workforce boards be? All of us need to evolve and work in new ways, so lifelong learning can be easy and effective.
McKinsey: Many experts have pointed to skills credentialing as a game changer for career advancement. Do you agree?
Kathleen McLaughlin: Yes, that’s one of the biggest things that’s changed in the past ten years. Educators, governments, retail employers, and workforce boards have collectively recognized that we need to find effective ways not just to accelerate skill acquisition but also to give people something to show for it. They need a marketable proposition in the employment market.
Not everybody can go back to school to earn an associate’s or bachelor’s degree, especially if they’re already working full time and have family obligations. We need to implement best practices for how people can acquire skills and create a more integrated system of credentials, so that we can recognize people for the skills they have as they earn them and reward them with career advancement.
McKinsey: Does Walmart issue credentials as part of the Walmart Academy program?
Kathleen McLaughlin: Walmart is approaching the issue of credentialing by, first, figuring out the relevant skills and most effective training for particular jobs. Those might be technical skills, so-called soft skills such as interpersonal skills, or even problem-solving skills, which are also really important. Then we have to determine how we can certify that somebody has them. We and many others are working on badges or certifications or some form of credential to signify that our workers have acquired certain skills. Our philosophy is that ultimately it needs to be a free market, but, as a society, it would be ideal if we could all agree on the standards required for certain kinds of roles and then start to issue certifications against those standards.
So, for example, we might say that to be an effective hourly supervisor, a person needs good problem-solving and leadership skills and a good technical understanding of retail operations with digital skills. Then we decide, what are the markers of those skills? Well, a marker might be an associate’s or bachelor’s degree in retail management, but it might be that they graduated from the Walmart Academy. Because that’s our program, that’s an effective marker for us. Or maybe it’s some other retailer’s program that’s equivalent. Or maybe it’s that they have gone to a well-known online learning site and completed a suite of microcredentials and earned a certification. Ideally, we’d love to see such a free system that can drive people to innovate and continually improve what’s being offered. At base, we all need to come to recognize equivalent markers and what markers are needed for which jobs. Credentialing systems are a work in progress.
McKinsey: A reasonable person could argue that some of the skill-credential standards could be set at the government level. Broadly, how do you think about the right role of governments in credentialing and ensuring that a skills marketplace works?
Kathleen McLaughlin: I think that governments at the state and federal levels can play an important role in encouraging experimentation, removing roadblocks to the kinds of innovation that we’re going to need to support training programs, and, ideally, financing training programs that work. Governments can also work to remove some of the logistical barriers that block working people from acquiring new skills and advancing their careers. At the municipal level, it might be as simple as looking at bus routes and making sure people can get to their workplaces or training centers at the right times. Accessible and affordable childcare and eldercare are also key to supporting people and enabling them to learn, work, and move up.
Walmart Foundation research shows that stability is really a key success factor in helping people build new skills and advance in their careers. In addition to childcare, things like parental leave and access to healthcare are so important. For people to be able to acquire new skills, they need to stick to a job and be able to take on and learn more. This is why we need collaboration across sectors to make this all work. It needs to be the employers, as well as government policy, as well as what education providers are doing, to make the whole system work for people.
Chosen excerpts by Job Market Monitor. Read the whole story at Improving skill-development programs to address the challenges of automation | McKinsey